Consensus community valuation
$0.120
Average Intrinsic Value
66.2%
Undervalued by
Active Member Straws
#North acquisition completed
Added 2 months ago
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#Quarterly Reports
Last edited 4 weeks ago

28-Apr-2020:  Appendix 4C - quarterly

This is straw #1 (of 2):

HIGHLIGHTS:

  • Q3 Revenue $8.3m - Exceeds Budget - up 137% from previous QTR 
  • On target to achieve $40m Revenue per annum run rate by 30 June 2020 (being revenue during the June 2020 quarter annualised) 
  • Q3 Customer Receipts of $7.1m up 214% from previous QTR 
  • $5.19m Available Cash as at 31 March 2020, up 39% from last QTR  
  • Over $2.89m received in Q3 from conversion of options 
  • north BDT Acquisition completed 
  • On target to achieve Monthly Profitability in Q4 
  • On target to achieve Cash Flow Positivity in Q4 on a monthly basis 

FINANCIAL UPDATE 
 
QUARTERLY REVENUE EXCEEDS EXPECTATIONS 

The Company is pleased to announce that its actual Q3 revenue of $8.3m exceeded its budgeted revenue of $7.4m by $900k (or 12%). 

ON TARGET TO ACHIEVE A REVENUE RUN RATE OF $40M PER ANNUM BY 30 JUNE 2020 

  • The strong quarterly revenue growth trend is projected to continue into Q4 FY20 and beyond with a full quarter contribution from north BDT.
  • The Company expects to meet its FY20 full year revenue budget of $22m and achieve a $40m revenue run rate by 30 June 2020.  
  • The $22m projection includes four months revenue contribution from north BDT and 6 months revenue contribution from Pure Security.
  • The company remains on track to achieve profitability on a monthly basis from 30 June 2020.

INCREASED CUSTOMER RECEIPTS AND STRONG CASH POSITION  

  • Receipts from customers of $7.1m for Q3 FY20, up 214% from the previous quarter.
  • The company had $5.19m cash as at 31 March (post-completion of the north BDT acquisition) and remains in a strong cash position going into Q4 and beyond.
  • Shareholders have demonstrated continuing support in the company’s strategy by exercising options which raised $2.9m in new capital during the March QTR.
  • The company projects that it will become cashflow positive on a monthly basis during Q4 2020.    

CUSTOMER UPDATE 

Strong organic growth has seen the group’s customer base continue to grow to in excess of 800 customers, supported over the last three years including 15 Federal Government departments and agencies as a result of the north BDT acquisition. This has translated to significant sales wins during the quarter across key products of firewall, SIEM and security consulting. Most notably, the Company secured $3m Federal Government, multi-year contracts.

ACQUISITION OF NORTH BDT

Tesserent’s transformation to Australia's #1 ASX-listed end-to-end Cyber Security company in FY20 continues with the north BDT acquisition being completed in March 2020.

north BDT is a Canberra-based security consulting firm specialising in providing Cyber Security, digital strategy and governance, end-to-end application development to Federal Government clients. The acquisition provides the Company with the opportunity to leverage north’s existing customer relationships for cross sales into Tesserent’s cyber offerings.  north BDT has a strong operating record, having delivered $8.3m revenue to 31 March 2020 and is projected to exceed $12m in their current financial year.  The Company is continuing to explore additional acquisitions and will keep the market updated as these initiatives progress.

COVID-19 UPDATE

As per the Company’s COVID-19 Update to the market on 16 April 2020, the Company has recently secured new business wins of more than $5 million. This, in addition to significant existing lockedin, long-term contracts with multiple Federal Government departments and agencies and multiyear managed security services income means the Company expects minimal negative impact on its financial performance in the June quarter.

The Company’s strong cash position, new business wins and existing contracted revenue sees the business well placed to weather the current economic conditions over the short to medium term. Should this situation change, the Company will keep the market informed.

FUTURE FOCUS

The Board and Management team are focused on continuing to build Tesserent’s position as Australia’s #1 ASX-listed Cyber Security provider by achieving several important goals over the coming months:  

  • Achieve forward revenue run-rate of $40m by 30 June 2020.
  • Achieve profitability and cashflow positivity on a monthly basis by 30 June 2020.
  • Continued integration of recently acquired business into TNT, including the expertise of staff and the development of cross-sell initiatives between business units in-line with Tesserent’s Cyber 360 strategy. 
  • Continued strong organic growth across all business units.
  • Potential strategic acquisitions where they make sense. 

...click on link above for more...

See separate straw (straw #2) for "IMPACT OF VIRGIN AUSTRALIA AIRLINES (VIRGIN) PLACED IN VOLUNTARY ADMINISTRATION (VA)"

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#Quarterly Reports
Added 4 weeks ago

This is Straw #2 (of 2) concerning TNT's March 2020 Quarterly Report [it wouldn't fit in straw #1]

IMPACT OF VIRGIN AUSTRALIA AIRLINES (VIRGIN) PLACED IN VOLUNTARY ADMINISTRATION (VA)

Virgin is a significant customer for our leading Splunk practice, Rivium.  As a result of Virgin being placed into VA, there is a potential reduction of Rivium’s FY20 revenue of up to $1.5m.  This includes a limited exposure to invoices that are currently with the administrator (<$100k) the more significant impact is the work that was scheduled and or expected to be delivered in Q4 of FY20.  We look forward to Virgin coming out of VA quickly and in a stronger position and look forward to working with them in the future.

The potential loss of revenue does not impact Tesserent’s expectation of $10m revenue in Q4 2020.

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